If you think portfolios are only for students applying to art school, think again. In the world of real estate, an investor’s portfolio will sometimes determine what kind of financing opportunities are available to them. At its core, a real estate portfolio is a catalogue of investment assets, often including both current and past real estate deals.
While some investors’ goal is to build a portfolio strong enough to provide them with financial freedom, others look to fulfilling more tangible, immediate goals: saving for retirement, paying off their own house, or even their children’s college education. Whatever the goal may be, there are things you can do as a real estate investor to take advantage of growth opportunities and build a strong portfolio that will impact both your short-term and long-term future.
Use real estate analytics and investment tools
Calculations – and accurate ones, at that – are immeasurably important for an investor’s financial success. Rental income, cash flow, cap rate, and more are metrics that make the foundation of any growing real estate investment portfolio. You should not only be familiar with the metrics, but also know how to calculate them.
Time to turn that single property portfolio into a multi-property portfolio
Whether you want to fulfill the short-term goals mentioned above, or want to retire early in life, you can’t get very far without growing your portfolio. To that end, you’ll need to do your due diligence on where to invest next and begin adding more to the mix. Of course, it’s difficult to make strategic moves without financing opportunities. The more accessibility you have to cash, the greater your ability to act quickly when new investment prospects surface. If you haven’t already, read about the financing options investors have available to them.
Diversify, diversify, diversify
A diversified portfolio ensures you’re taking less risk with your investments and opens doors to greater opportunities for financial success. One way to do diversify your portfolio is by stretching your wings a bit and looking outside of your own neighborhood, community, or city. Explore other markets and the opportunity to dip your toes in long-distance investing.
There’s no I in real estate
The more properties you acquire, the more important management, delegation, and a trusted lender relationship become. Building a reliable team of professionals around you not only ensures that you’re not stretched thin yourself, but that your portfolio is being cared for while you continue to focus on growth and business development. Outsourcing your weak spots to those for whom the work is their bread and butter will help keep your business going smoothly.
What are some of the external hires you can make? A great CPA can be a huge asset when tax season rolls around. Hiring a property management company can also help streamline your day-to-day operational tasks.
Keep your business plan handy
The importance of developing a strong business plan can’t be emphasized enough. Deciding what your objectives are – both long-term and short-term – will help you define strategic investment decisions and keep things in perspective. Additionally, in the event that you plan to bring a business partner onboard, presenting them with a well-established investment plan will only increase your chances of solidifying the partnership.
Even if goals shift or you feel an adjustment is necessary, that pivot will feel more strategic and informed rather than haphazard and half-baked. If you’re ready to add to your portfolio but still need the right financing partner, contact Temple View Capital and learn how we can help.